Trade90 Safety System
Prop Firm Risk Management
The complete risk management framework for US-based funded traders. Built around two rules: 0.5% maximum risk per trade and a 1% daily risk target. These are Trade90's internal discipline guidelines — not official prop firm rules — designed to keep your challenge drawdown clean through any losing streak.
POSITION SIZER
Multi-Asset Protocol
Your current account equity or challenge balance
Trade90 Safety System: 0.5% max per trade
Your planned trade entry price
Price where your trade idea is invalidated
Your target — used to calculate R:R ratio
Recommended Position
✓ SAFEStandard Lots
Total Risk
$500.00
R:R Ratio
1:1.00
Stop Pips
50.0
Core Framework
The Four Rules of Prop Firm Risk Management
These rules apply to every prop firm evaluation — FTMO, Apex, The5ers, E8, and any future program. The mathematics of drawdown does not change based on the brand.
Risk 0.5% Per Trade Maximum
Never risk more than 0.5% of your current account balance on any single trade idea. At this level, five consecutive losses costs 2.5% — well inside every prop firm's daily loss limit. Use your current equity, not your starting balance. As drawdown accumulates, the dollar amount per trade shrinks, which is correct behavior.
Personal Daily Cap of 1%
Set your personal daily stop at 1% — half the typical prop firm daily limit of 4–5%. When you have risked 1% of your balance across all trades today, stop trading. This buffer means you can have two consecutive bad days before approaching your firm's daily limit. It also prevents revenge trading.
Two Trades Per Day Maximum
At 0.5% risk per trade, two trades equals 1% maximum daily exposure — exactly the Trade90 daily target. Two trades forces selectivity. You wait for the clearest setups. After two trades — whether winning, losing, or flat — close the platform. Volume is the enemy of disciplined evaluation trading.
Verify Range Before Entry (ADR Check)
Check the Average Daily Range before every entry. If the pair has already consumed more than 70% of its average daily range before your setup, the trade carries disproportionate stop-hunt risk. Use the ADR consumption check as a final gate: low consumption = room to run = higher probability.
The Math Behind Prop Firm Drawdown Rules
Every prop firm evaluation has a maximum daily loss and a maximum total drawdown. Here is what different risk levels look like across losing streaks on a $100,000 account:
| Risk Per Trade | 5 Losses | 10 Losses | 15 Losses | Status |
|---|---|---|---|---|
| 0.5% | –$2,500 (2.5%) | –$4,878 (4.9%) | –$7,143 (7.1%) | Safe |
| 1.0% | –$4,878 (4.9%) | –$9,562 (9.6%) | –$14,012 (14.0%) | Borderline |
| 1.5% | –$7,143 (7.1%) | –$13,786 (13.8%) | –$19,955 (20.0%) | Dangerous |
| 2.0% | –$9,231 (9.2%) | –$17,627 (17.6%) | –$25,282 (25.3%) | Challenge Fail |
Compound drawdown calculated on rolling equity. Most prop firms use 10% maximum total drawdown and 4–5% daily loss limit.
Position Sizing Step by Step
Formula
Risk Amount ($) = Account Balance × (Risk % ÷ 100)
Pip Distance = |Entry Price − Stop Loss| ÷ Pip Size
Lot Size = Risk Amount ÷ (Pip Distance × Pip Value per Lot)
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